Good afternoon and thanks so much for joining us. With me here today is Vida Bottom, Chief of the Public Corruption Civil Rights Section of the FBI’s Criminal Investigative Division. We are here to talk about the department’s second round of charges as a result of the department’s ongoing international cartel investigation of price fixing and bid rigging in the automobile parts industry.
The auto parts investigation is the largest criminal investigation the Antitrust Division has ever pursued, both in terms of its scope and the potential volume of commerce affected by the alleged illegal conduct.
The Antitrust Division and the FBI have worked hand in hand to root out and prosecute the pernicious cartel conduct we have uncovered in the automobile parts industry that has harmed car buyers and auto manufacturing businesses nationwide.
I know that many of you have seen the press release, so I’ll just mention a few important aspects of these cases.
Yazaki Corporation and DENSO Corporation have agreed to plead guilty and to pay a total of $548 million in criminal fines for their involvement in these conspiracies. Four Yazaki executives have also agreed to plead guilty.
Yazaki is paying a $470 million criminal fine – the second largest criminal fine ever imposed for an antitrust violation. DENSO has agreed to pay a $78 million fine.
And importantly, the Antitrust Division continues to hold corporate executives accountable for their illegal conduct. The four executives charged today have agreed to serve time in prison in the United States ranging from 15 months to two years.
Two of the executives have agreed to serve two years in prison – the longest term of imprisonment imposed on a foreign national voluntarily submitting to U.S. jurisdiction for an antitrust violation.
Today’s charges were filed in U.S. District Court in Detroit. The plea terms are subject to court approval.
Including today’s announcement, more than $748 million in criminal fines have been obtained in the investigation thus far, and our investigation is still active and ongoing. These fines already surpass the total amount in criminal fines obtained by the division for all of last fiscal year.
You will recall that Furukawa Electric Company pleaded guilty and was sentenced to pay a $200 million fine for its role in the wire harnesses conspiracy and three of its executives also pleaded guilty. Two of the executives have been sentenced to serve prison time in the United States, and the third is scheduled to be sentenced next month.
Let me discuss briefly how the conspiracy worked.
Yazaki engaged in three separate conspiracies to rig bids and fix prices of automotive wire harnesses, instrument panel clusters and fuel senders.
DENSO engaged in conspiracies to rig bids and fix prices of electronic control units and heater control panels.
All of these parts are essential to the wiring, circuit boards, gauges and fuel tanks of automobiles.
The executives, who held various positions in Yazaki with responsibilities including managing sales to Honda and Toyota, participated in the wire harness conspiracy.
All of the conspirators carried out the conspiracies by agreeing during meetings and conversations to allocate the supply of the products on a model-by-model basis and to coordinate price adjustments requested by automobile manufacturers in the United States and elsewhere.
They sold the auto parts to manufacturers at non-competitive, rigged and fixed prices and monitored the prices to make sure those involved in the conspiracies adhered to the agreed upon bid-rigging and price-fixing schemes.
The division’s National Criminal Enforcement Section and the FBI’s Detroit Field office have been conducting this international investigation. And, FBI headquarters’ International Corruption Unit has provided invaluable assistance. We have been true partners with the FBI on this matter. We have also coordinated with our international antitrust enforcement colleagues in Japan, the European Union and Canada on this matter.
Now, Vida would like to say a few words about the excellent work of the bureau’s Detroit Field Office.
We are happy to take your questions.